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Thursday, May 24, 2012

Fw: Tax and financial havens: a threat to the EU's internal market

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From: PressEESC <press@eesc.europa.eu>

Sender: Peter Makeda <Makeda.Peter@eesc.europa.eu>

Date: Thu, 24 May 2012 13:50:08 +0000

Subject: Tax and financial havens: a threat to the EU's internal market

PRESS RELEASE

No 30/2012

24 May 2012

Tax and financial havens: a threat to the EU's internal market

Tax and financial havens quite often cover up laundered money gained not only by legal means, but also from crime and economic offences, such as tax evasion and corruption. The increasing disruption caused to the functioning of the internal market triggered the EESC to endorse an own-initiative opinion on tax and financial havens at its May plenary session. Among other measures, it demands tougher controls and greater coordination to fight against this malpractice.

The economic crisis has further incited the need for an adequate EU policy against tax and financial havens. Illicit capital flows (that rise by more than 10% annually) have disastrous implications for the on-going sovereign debt crises. Furthermore, Member states that are obliged to introduce drastic budget cuts do not receive billions of euros, due to fiscal evasion. Just as in Spain, this amount is estimated at 90 billion Euros, whereas the national government has recently introduced dramatic cuts in the public education and health care systems.

"Tax and finance havens are part of the history of capitalism, with examples dating as far back as the late Middle Ages," stated Edgardo Maria Iozia (Workers' Group, Italy), rapporteur of the EESC opinion adopted today. "But the phenomenon has now ballooned to substantial proportions, having spread to every part of the world – the Pacific, the Caribbean and islands in the Atlantic – since the Second World War, including small and micro-states in Europe".

In order to put an end to this abusive practice, the EESC demands further action to eradicate opaque tax jurisdictions and to compel Member States to combat crimes that originate in many of these jurisdictions. The current legislation leads to an abuse of the principle of "residence" by means of ownership arrangements and fictitious residency. Holding companies not actively engaged in business allow the owners to avoid paying taxes in their country of domicile. According to the EESC opinion, it is necessary to restrict the right to free establishment in the case of completely spurious businesses set up exclusively for tax purposes.

In addition, the EESC also proposes to remove all obstacles to the automatic exchange of bank information so that the authors of transactions and owners of bank accounts can be easily identified.

"The most serious crimes such as murder, extortion, arms and drugs trafficking or the trafficking of women and children are quite often backed by the so-called tax havens. Because of ethical and economic reasons, the European Union should take a tough stance against this current form of fiscal piracy", concluded Bernardo HernándezBataller (Various Interests' Group, Spain).

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Ionela Flood

About Me

I was awarded a bursary in cultural management by the Ministry of Culture, Romania, in 1999, studing in Italy, Greece, France and United Kingdom.Being resident in London since 2001, I am currently undertaking PhD research with a bursary from the Ministry of Education of Romania in the area of Project Management while developing projects for Romanians abroad.
I am a Former Director of the Mihai Eminescu Centre in Bucharest, and founded the Magazine Enigmaticul in 1999 and initiated the Mihai Eminescu Festival, The Festival of 3rd Millennium and the Sports Dance Festival.I became President of the Info Manager Association in 2001,Vice President of Liga Culturala a Romanilor in 2004 and Chair of Romanca Society in 2006, promoting the development of management, marketing and networking in Romanian’s socio- cultural activity.The latest projects that I have been involved with are in the area of culture, business and education: A Romanian Musical Adventure in partnership with the Silvestry Foundation, Art and Music Festival with Pro Patrimonio Foundation, Eco Energy Europe Project for Aardvark, QIEI 2008 with ASE and Invitation to Composers with London Schubert Players Trust in 2010.